Choosing a Health Insurance Plan
Choosing a health insurance plan can be complicated! There are several things to consider when comparing and choosing a health insurance plan, like the total cost and what kind of care you or your loved ones need. Scroll down to learn about health insurance and make your decision easier! You can also click on the links above to jump to that section. If you take the quiz at the end of the page, you'll enter a raffle to win $100!
WHAT IS A HEALTH INSURANCE PLAN?
HEALTH INSURANCE PLANS COVER THESE SERVICES
Health insurance plans usually cover these services:
doctor and hospital visits
prescription drugs
mental health and substance use disorder services
pediatric services
rehabilitative and habilitative services and devices
laboratory services
emergency services
ambulatory patient services
preventative and wellness services and chronic disease management
hospitalization
maternity and newborn care
HEALTH INSURANCE PLANS DON'T COVER THESE SERVICES
"Off-label" prescriptions are usually not covered by health insurance plans!
Fertility treatments are usually not covered by health insurance plans!
Plastic surgery is not covered by health insurance plans!
TYPES OF HEALTH INSURANCE PLANS
WHAT IS A HEALTH MAINTENANCE ORGANIZATION (HMO)?
One of the most common types of health insurance plans is the health maintenance organization (HMO). These plans typically have lower monthly costs than other types of plans, but do not give you as much freedom when choosing a doctor.
HMO health insurance plans are perfect for: individuals or families seeking low-cost coverage & not worried about a limited network of doctors or getting referrals for specialist visits.
This video explains the characteristics, advantages and disadvantages of an HMO plan.
WHAT IS A PREFERRED PROVIDER ORGANIZATION (PPO)?
Another common type of health insurance plan is the preferred provider organization (PPO). These plans typically have higher monthly costs than other types of plans, but give you more freedom when choosing a doctor.
PPO health insurance plans are perfect for: individuals or families not worried about a higher cost plan & seeking more flexibility in terms of having a larger network of doctors and not needing referrals for specialist visits.
This video explains the characteristics, advantages and disadvantages of a PPO plan.
WHAT IS A HIGH-DEDUCTIBLE HEALTH PLAN (HDHP)?
The third most common type of health insurance plan is the high-deductible health plan (HDHP). Also referred to as a "consumer-driven health plan", these plans cost less per month, but have higher deductibles. Additionally, these plans are often attached to a Health Savings Account that allows you to set aside pre-tax dollars for out-of-pocket expenses, which helps cover the cost of a high deductible.
HDHP health insurance plans are perfect for: individuals or families that have the means to make significant contributions to a health savings account (HSA), & young and single employees who are more likely to be healthy and don't need coverage for spouses and dependents.
This video explains the characteristics, advantages and disadvantages of a HDHP.
PPOs vs. HDHPs
This video explains the similarities and differences between preferred provider organization plans (PPO) and high-deductible health plans (HDHP). PPOs cost more per month, but have a lower deductible. HDHPs have lower monthly costs, but higher deductibles. Both provide more options for doctors than a health maintenance organization plan (HMO).
HMOS, PPOs, & HDHPs
Most health insurance plans differ in how much you pay out of your paycheck, how much you pay at the doctor, and how much freedom you have in choosing a doctor. This video explains the differences between HMOs, PPOs, and HDHPs.
THE TOTAL COST OF HEALTH INSURANCE: PREMIUMS, DEDUCTIBLES, COPAYMENTS, & COINSURANCE
When selecting and comparing health insurance plans, it's important to think about your total health care costs, ranging from the monthly premium that you pay your insurance company, to the out-of-pocket costs (e.g., deductibles, copays, coinsurance) that you pay your health care provider. Scroll down to learn about the most commonly used terms to describe the cost of health insurance.
UNDERSTANDING HEALTH INSURANCE:
PREMIUMS, DEDUCTIBLES, CO-PAYS & OUT-OF-POCKET MAXIMUMS
This video defines and clears up confusion surrounding the most frequently used health insurance terms: premiums, deductibles, copays, and out-of-pocket maximums. Understanding these terms is important so you know how much health insurance plans cost and you can pick the right plan for you.
Here's a summary of the video: Health insurance plans involve sharing medical costs between yourself and an insurance company. You pay for part of your medical expenses through a premium (a fixed amount removed from your paycheck) and a copay, coinsurance or deductible (amounts that you might need to pay when you go to the doctor, have a medical exam, or pick up a prescription) - and your insurance plan pays the rest.
If you'd like to learn more about each of these terms, scroll down for additional videos and more detailed definitions.
WHAT IS A PREMIUM?
A premium is the amount that you must pay for your health insurance every month, even if you don't go to the doctor. If you get health insurance through your employer, this is usually deducted from your paystub. When shopping for a health insurance plan, keep in mind that the plan with the cheapest monthly premium may not be the best match for you. If you have a lot of medical needs, a plan with a slightly higher premium but a lower deductible may save you more money. The opposite is true if you don't have many medical needs.
This video explains what a premium is, the person who pays your monthly premium depending on how you receive insurance (i.e., employer, Medicaid, etc.), and the importance of paying your monthly premium.
WHAT IS A DEDUCTIBLE?
A deductible is the amount that you must pay for health care services BEFORE your health insurance begins to pay. This does not include the amount that is taken out of your paycheck each month (your premium).
This video explains what a health insurance deductible is. It gives an example of how deductibles work and shows how much you would be responsible for paying in covered expenses by using a sample health insurance plan and applying it to a $10,000 medical bill.
WHAT IS A CO-PAY?
A copayment ("copay") is a fixed amount that you must pay upfront for a procedure, medical examination, or prescription drug.
This video explains what a co-payment is, the role that insurance providers play in setting co-payment amounts, and when you would have to pay your co-payment.
WHAT IS CO-INSURANCE?
Co-insurance is the percentage of your medical bill that you must pay for a procedure or service AFTER you've hit your deductible.
This video explains what co-insurance is, and the relationship between co-insurance and deductible in order to fully understand how much your insurance plan is going to cost you.
WHAT ARE OUT-OF-POCKET MAXIMUMS?
The out-of-pocket maximum is the highest amount that you'll have to pay in a year for your medical expenses, in addition to your monthly premium. If you reach this amount, the insurance company pays 100% for covered services so you no longer need to pay your deductible, co-pay or co-insurance.
This video explains what out-of-pocket maximums are and provides an example of how they work.
HOW TO ENROLL IN HEALTH INSURANCE
You've learned about the different types of health insurance plans and weighed the pros and cons of each based on their cost and your medical needs. Now you're ready to enroll in health insurance! There are two main ways to do so:
1. If your employer offers health insurance: You can enroll in a health insurance plan through your employer during open enrollment, which is usually a 2-week period at the end of the year. It's important to enroll during this time because you won't be able to enroll again until the following year (unless you have a qualifying life event). Keep your eyes peeled for an email from your employer letting you know that it's time to enroll in health insurance and email your employer's HR team if you have any questions.
2. If your employer does NOT offer health insurance: You can enroll in a health insurance plan through the government by applying for Medicaid or Medicare.
Medicaid: Medicaid provides free or low-cost healthcare for individuals who qualify based on income and family size. You can find out if you’re eligible and apply here: https://www.usa.gov/medicaid.
Medicare: Medicare provides free or low-cost healthcare for individuals who are at least 65 years old or have a disability. You can find out if you’re eligible and apply here: https://www.usa.gov/medicare.
APPLY FOR HEALTH INSURANCE IN YOUR STATE
Find your state below then click on its blue link to open the website for its health insurance marketplace.
Covered California is California’s health insurance marketplace where you can compare health insurance plans and apply for the one you prefer, including Medi-Cal.
California residents are required to have minimum health insurance coverage for themselves and their dependents. If your employer doesn’t offer health insurance, you can apply for state health insurance called Medi-Cal, which provides free or low-cost healthcare for California residents who qualify based on income. You can find out if you’re eligible and enroll year-round here or by calling (800) 300-1506.
New York State of Health is New York’s health insurance marketplace where New York residents can find and apply for low-cost health insurance plans for themselves and their families.
QUIZ (AND RAFFLE!) ON CHOOSING A HEALTH INSURANCE PLAN
Take the quiz below by answering all of the questions. Anyone who completes it will be entered into a raffle to win $100! Raffle winners are drawn each quarter.
DIRECTIONS FOR QUIZ: Read each question then check the box next to the right answer. This is a learning opportunity so you're entered into the raffle when you click "Submit" at the bottom of this form - it doesn't matter how many questions you get right. You can see which answers were correct by clicking "View Score" after you submit your response.